Total To Operate Two Irish Deepwater Blocks
Total has signed deals to operate two deepwater blocks in Ireland's offshore Southern Porcupine basin, it was announced June 7. The Atlantic margin area has seen a sharp upturn in oil and gas exploration interest in the past two years.
In one of the blocks, UK independent Cairn will also become a partner. Both farm-ins and Total’s operatorship are subject to Irish ministerial approval.
In one block, FEL 2/14, which is 220 km off southwest Ireland in water depths of 2,200 metres, Total has the right, but not the obligation, to farm-in to a 35% working interest subject to payments of $21.6mn to Irish independent Providence Resources and $5.4mn to its UK-Danish partner Sosina.
The option can be exercised by Total within 60 business days of completion of Providence’s upcoming 53/6-A well, planned to spud in late June 2017, targeting the Druid and Drombeg prospects. FEL 2/14 is currently operated by Providence (56%), partnered by Cairn (30%) and Sosina (14%). Cairn announced its farm-in to this – and a separate nearby Europa Oil & Gas licence – less than three months ago.
In the other agreement announced June 7, Total is to take over as operator with a 50% interest, with Cairn taking a 20% interest, in the Irish offshore LO16/27 block some 150 km off southwest Ireland with water depth of 1,300 km – with the block’s licensees Providence and Sosina seeing their 80% and 20% interests reduced to 24% and 6% respectively.
In return Total will pay some initial costs but, more significantly, should partners decide to convert LO16/27 into a Frontier Exploration Licence and a drill an exploration well, Total will pay 60% of the drilling costs, up to a gross well cap of $42mn.
Of Total, Providence CEO Tony O’Reilly said: “Partners will have the benefit of being operated by an industry leader in deep-water hydrocarbon exploration and development”. The Irish Atlantic margin area has seen a recent spike in oil and gas exploration interest, with several majors participating in the latest Irish offshore licensing round awarded in early 2016.